Motilal Oswal's research report on Kotak Mahindra Bank
Kotak Mahindra Bank (KMB) reported strong earnings growth in 4QFY23. Standalone PAT rose 26% YoY to INR35b (16% beat), driven by lower opex and controlled provisions as PPoP was up 39% YoY. Consolidated PAT grew 17% YoY to INR45.7b during the quarter. Loan growth moderated sequentially to ~3%, while margin expanded further by 28bp QoQ to 5.75%. CASA ratio moderated 50bp QoQ to 52.8%. Gross slippages increased slightly to INR8.2b, of which INR2.2b were upgraded in 4QFY23. Healthy recoveries and upgrades led to a 12bp/6bp QoQ decline in the GNPA/NNPA ratios. KMB reversed INR130m of Covidrelated provisions; outstanding Covid-related provisions now stand at INR3.87b (12bp of loans).
Outlook
Reiterate Neutral with a TP of INR2,050 (based on 3.0x Sep’24E BV and INR524 for its subsidiaries).
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